Farm Bill More Than Just Peanuts For Some Farmers

by: June 10, 2012

Southeast of Macon, near Oglethorpe, Ga., rows of peanuts planted six weeks ago have sprouted. Tiny yellow flowers dot the rich green plants. Donald Chase, his father and grandfather have owned this farm since the 1950s.

Chase knows there’s no support in Congress this time around for direct payments to farmers because ending those payments is expected to save some $5 billion a year. He says crop insurance doesn’t work for many southern farmers, including those who plant cotton, rice, peanuts and even the feed corn he grows here.

“This program favors Midwestern corn and soybean farmers,” Chase says. “It doesn’t even favor me as corn farmer in Georgia because our county average yields are set so low that I’ll never file a claim if we go to and insurance based program.”

The price farmers can get is also an issue. Row crops, including corn, are based on the commodity markets. The price of peanuts, however, is based on what the three major shelling and processing companies will pay. So Chase says that if there are no government price supports, then that means more farmers could decide not to plant.

“There’s nothing that sort of evens out the ups and down in the market and it becomes very volatile,” he says. “And for me, I’m thinking this is getting risky.”

Chase says his expenses are higher than those in the Midwest because he has to buy special equipment for his crop. He says his cost is about $1,000 dollars an acre, and he plants 450 acres of peanuts. That $450,000 is a big investment to put out at the beginning of every year and hope that something comes from it, he says.

Chase says the result of the proposed Senate bill could be wild swings in supply. The downside for consumers is the possibility of higher prices. For example, last year, there was a smaller peanut crop because many farmers planted cotton instead, and then there was a drought. As a result, the price of peanut butter increased by about 30 percent.

“I think what it means is a major disruption in the economies of rural south Georgia and the rural south from Texas to Virginia,” says Don Koehler, executive director of the Georgia Peanut Commission.

Koehler says farmers in Georgia, who produce nearly half of the U.S. peanut crop, need a better program. Instead of direct payments, a kind of price support system would help stabilize farmers, he says.

“If you’re not going to give anything to peanut farmers in the south, [then] why do the Midwestern corn and soybean guys need anything?” Koehler says. “Let’s just let the fur fly with the hide, just don’t have anything. Let’s do away with the whole farm bill. Let’s just see what happens with nothing because that’s what we’ve got right now, nothing.”

Others say that even with the $23 billion in cuts over ten years, the new farm bill is still way too expensive.

“The current Senate bill does nothing to reform the entire system,” says Andrew Roth of the conservative Club for Growth. “It creates the dependency on government that has plagued this whole thing for so long.”

Roth says the government shouldn’t provide subsidies to any group.

“If there was some sort of reform in the bill that tried to wean the industry off of subsidies we’d be open to that, but there is nothing like that in these bills,” he says.

Georgia farmers, however, say they need assistance in times of natural disasters and when crop prices fall.

“We know that we’ve got to take our share of the cuts and so we’re not fussing about trying to do that, but we still need a safety net,” says Don Koehler.

Georgia peanut farmers say they know they have a lot of work to do to convince politicians in Washington that they need help. They say the Senate hasn’t been listening, but that they might have a better chance when the House takes up its version of the bill.